Air N.Z. FPO NZ (ASX: AIZ) – otherwise known as Air New Zealand says it is reviewing its shareholding in Virgin Australia Holdings Ltd (ASX: VAH), including a possible sale of all or part of its holding.

Air New Zealand holds around 26% of Virgin Australia, along with Singapore Airlines (23%) and Etihad Airways (24%). The 3 airlines own 73% of the company between them. Sir Richard Branson’s Virgin Group also has a substantial stake of 10%.

The four major shareholders recently kicked in another $425 million in loans to give Virgin ‘additional flexibility’.

Air New Zealand’s chairman Tony Carter says the airline doesn’t want a large minority equity position in Virgin – as it focuses on its own growth opportunities. But the company says it is still supportive of Virgin and looks forward to continuing its partnership on the Tasman alliance.

Air New Zealand CEO Christopher Luxon will resign from the Virgin board immediately.

The sale of its stake in Virgin would raise around A$347 million, with Air New Zealand holding more than 913 million shares.

The question will be who will Air New Zealand sell its stake to?

Would Singapore Airlines and Etihad split the stake or would one of them take the whole stake? I imagine either airline would be interested in both options. The other option, of course, is to sell the stake on the market to fund managers and retail investors, now that Virgin has managed a significant transformation of its financial performance over the past five years.

A truce between Virgin and major rival Qantas Airways Limited (ASX: QAN) in the domestic space has allowed both airlines to profit while the falling oil price has proved to be a nice tailwind.

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Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.